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The result, over time, would be identical, all things (rate of return) being equal and probably better when the higher annuity expenses are contrasted with a low-cost mutual fund. Right?


I wouldn't necessarily write off all variable annuities, but I would suggest looking very carefully at costs. Often expenses are quoted in investment advisory fees plus M&E Fees; sometimes they are combined. However, most (not all) annuity products offered under a 403(b)1 come with high fees. (The exceptions I know off the top of my head are TIAA-CREF and Vanguard, either of which I would consider acceptable. But then I have my 403(b) in TIAA-CREF and I am in the middle of the process of transferring from my previous 403(b) provider that had about seve times the expenses.)

On the other hand, it seems simple to find a Roth IRA custodian that has reasonable fees.
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